Uncertain socio-economic context and a difficult spring 2019 growing season

• Livelihoods are deteriorating as a result of high commodity prices and the persisting drought hampering the spring 2019 growing season, particularly in the north of the country. The poorest households continue to engage in negative coping strategies to meet their food needs. As a result, most regions remain in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) food insecurity.

• Markets are constantly supplied, both with local products (especially in the Greater South) and imported products. Although the price of imported rice remains above average, it remains relatively stable compared to other products.

• The maize and bean crops planted in February are beginning to be harvested, particularly in Grand’Anse and the wet mountain areas of Nippes and Sud. Meanwhile, in the irrigated plains, maize and bean plantations forecast good harvests. However, the situation is difficult in drought-prone areas, particularly the Greater North and coastal areas (Nippes and Sud).

Current situation

Socio-political disruptions: The current socio-political situation is volatile and uncertain, against a backdrop of a lack of government, insecurity, accelerated depreciation of the gourde and inflation reaching 17.6 percent. The audit report of the Supreme Court of Accounts and Administrative Litigation (CSC/CA) on the management of Petrocaribe funds only accentuates the fragility of the current socio-economic and political context.

The main sources of foreign exchange likely to slow down the depreciation of the national currency are affected by this climate:

• The export sector is severely affected by the Ministry of Trade and Industry (MCI) employee strike. In addition to the permits and visas granted to exporters by the MCI, the strike has caused the textile sector in duty-free zones, among other sectors, to experience difficulties in exporting for three weeks. Current budget support contracts with international partners such as the Inter-American Development Bank, the World Bank, the European Union and the International Monetary Fund cannot be signed due to a lack of government.
• The tourism sector has experienced an unprecedented decline as the current crisis has deepened.
• Foreign Direct Investments (FDIs), which had already fallen sharply by 78 percent in 2018, continue to exhibit the same trend.

In the meantime, the Bank of Haiti (BRH) has announced a package of measures to prevent the gourde from plummeting further, including the injection of foreign currency, increased interest rates on BRH bonds and cash management. Until these measures are implemented, the situation will severely affect households’ purchasing power and thus their access to food, which is primarily dependent on markets.

Climatic conditions and outlook: Overall, the precipitation levels recorded in May are below average, although an increase was observed during the third dekad in all departments except Sud-Est. Despite the irregularities in the temporal and spatial distribution of rainfall, the percentage of cultivated land affected by the low rainfall between the beginning of the season and the third dekad in May does not exceed 10 percent, except in Nippes, where it reaches between 25 and 40 percent. The normalized difference vegetation index (NDVI) shows conditions that are very close to average (Figures 1 and 2), particularly in Nord-Ouest, Ouest, Centre, Nippes and Sud. The index is even higher than average in Artibonite and Sud-Est and lower than average in Nord and Nord-Est.

Impact on seasonal crop production: Precipitation in the third 10-day period in May proved very favorable to the development of spring crops (beans and maize in April), bananas, root vegetables and tubers (yams and cassava), citrus fruits and groundnuts, particularly in departments with 40 percent less rainfall than average in April and the first two dekads in May (Sud, Nippes, Sud-Est and Grand’Anse).

However, despite around 20 mm (24 percent) of rainfall above the average during the third dekad in May in the department of Nippes, particularly in the communes of Anse-à-Veau, Arnaud, L’Asile, Petit-Trou-de-Nippes and Plaisance-du-Sud, the agricultural stress index measured by the percentage of cultivated land affected by low rainfall is as high as 40 percent. Crops in these communes are growing at a below-average rate. In fact, maize and black bean harvests have even been observed in some areas where the Spring growing season began early, including in Grand’Anse and the mountainous areas of Nippes and Sud.

Food availability: The local food available is mostly beans and maize, which are currently being harvested in the abovementioned regions, bananas, root vegetables and tubers, and wild produce such as breadfruit (especially in Grand’Anse and Sud), some fruits (citrus fruits, mangos) and market garden produce, particularly in the HT06 area. On the whole, the markets are well supplied, though mostly through imports, as is usually the case.

Price trends: At the national level, commodity prices are rising, exacerbated by political turbulence and the depreciation of the gourde against the United States dollar and the Dominican peso, the currencies of Haiti’s main trading partners.

Prices for local products, particularly maize and black beans, continue to rise, although at a lower rate than in February. The price of grain maize increased by more than 4 percent on average, from 131 to 137 gourdes in April, and by 5 percent between April and May, close to 145 gourdes/6 lb marmite. For the same period, the price of black beans rose by more than 6 percent on average, with a 6 lb marmite rising from 349.2 gourdes in March to over 371 gourdes in April and almost 400 gourdes, almost 8 percent, in May.

As for the price of imported products, the trend remains upwards given the sudden rise of the United States dollar against the gourde. The price of imported rice, after slight drops in March and April, rose significantly in all markets, with the exception of Port-au-Prince. The 6 lb marmite price rose from almost 223 gourdes to almost 245 gourdes in May, an average growth of around 10 percent at the national level. It should be noted that this increase was very significant on the Cayes market, with a positive change of almost 29 percent.

Animal production: The livestock situation, particularly of cattle and goats, has recently improved as a result of the latest rains, which have made fodder and water less scarce. Furthermore, the availability of mangos in relatively significant quantities in some areas is an important source of food for pigs.

Supply and demand for agricultural labor: In June, agricultural activities are mainly focused on the spring harvests, in areas where rainfall and crop weeding had been favorable and the spring growing season began in mid-April or May, such as Nord-Est and central Haut-Plateau. Labor demand is relatively low but varies from one region to another. In Sud, workers are hired on vetiver plantations and paid 100 gourdes a day.  In Sud, workers are hired on vetiver plantations and paid 100 gourdes a day. This sector is very active in Sud, as this crop is important in the production of Haitian essential oils that are in high demand on the international market. In addition, many households in border areas make income from other sources, including migrating to another city or country. Low demand for labor has an impact only on households that have difficulties accessing other sources of income or migrating.

Other sources of income: Poor households are also engaged in subsistence activities such as small-scale trade, especially the sale of charcoal, which gradually intensifies in the Stressed and then Crisis phases. In border areas, in addition to charcoal, migration continues to be an attractive alternative to the deteriorating socio-economic conditions in the country, given the more competitive working conditions in the Dominican Republic. However, the adverse climatic conditions that also affect the Dominican Republic have rendered demand low in relation to normal conditions.

Food consumption and changes in livelihoods: The poorest households, who largely depend on market purchases for their food consumption, have seen their purchasing power gradually diminish as a result of a significant decline in income-generating agricultural activities and the rise in food commodity prices, compounded by the depreciation of the gourde and the unstable socio-political situation. Repeated shocks and their lasting impact are therefore key elements that affect the stocks and savings of the poorest households, who already lack resilience under normal circumstances. In rural areas in particular, intensifying the production and sale of charcoal, in addition to other small-scale trade, still offers an alternative to the current situation.

Assumptions

The most likely scenario for June 2019 to January 2020 is based on the following assumptions:

• ENSO conditions and weather forecasts: Irregularities in the temporal and spatial distribution of rainfall during the start of the country’s largest growing season, the spring season, are likely to have a negative impact on harvests in June, July and August. Furthermore, an extension of the dry period between the two rainy seasons would weaken the performance of the summer and autumn growing seasons, which already depend on the performance of the spring season. The cyclone season, which generally starts in June and ends in December, is expected to be slightly below average.
• Agricultural production and harvesting: Harvests and picking in spring (maize, beans, etc.) and summer (beans and then maize in cold areas) will yield below-average results, according to the agroclimatic projections for the period analyzed. Between June and July, mangos (all varieties) will be available throughout almost the entire country. The mango harvest is expected to be above average and should reach its peak in June. Mangos are likely to be replaced by avocados between August and December.
• Agricultural labor: The harvest activities of the spring and summer/autumn growing seasons and the launch of the winter growing season will give new momentum to the demand for agricultural labor. Supply may be limited because of the many workers who choose to migrate elsewhere in search of more attractive working conditions, particularly in the Dominican Republic.
• The sale of charcoal: This activity could be reduced at the end of the lean season in June 2019 in areas where the spring harvests are normal. It should, however, intensify in agro-ecological areas where losses are anticipated for the spring 2019 growing season.
• These sources of income may be supplemented by the sale of mangos (between June and July), avocados (between August and December), fishery products and livestock products, among others. Income from the sale of mangos is likely to be slightly above average and around average from the sale of animals and animal products. Income from fishing will depend on the nature of the cyclone season and, since the season does not present excessive risks, results are expected to be close to average or slightly above average.
• General price trends: Food commodity prices are likely to rise. The inflation rate will be higher than the average for the 1993–2013 period, which is around 15 percent. This inflation may be affected by the depreciation of the gourde (monetary inflation) and the increase in production costs (labor, agricultural inputs, etc.). Prices of imported food products, especially rice, are expected to increase.
• Remittances: Remittances from the Haitian diaspora may stagnate until August, and then increase in September (when schools reopen) and December (for the end-of-year festivities). Although this will not directly benefit very poor households, its possible impact on the availability and circulation of the United States currency in Haiti could help reduce pressure on the gourde/dollar exchange rate and, consequently, make imported food temporarily more affordable.
• Trends in the exchange rate: The Haitian currency continues to depreciate against the United States dollar and the Dominican peso. The depreciation rate, which was 17.5 percent in 2018, is likely to be even higher this year. The lack of government, political instability, negative expectations owing to a lack of confidence in the gourde on the part of economic agents and even the decline in Haiti’s main sources of currency are all determining factors in the depreciation of the gourde. This depreciation may have a significant impact on imported staple food prices and thus on the purchasing power of households, particularly the poorest.
• Spending behavior: Households’ non-food expenditure, especially when schools reopen between September and October, is likely to rise between the end of 2019 and the beginning of 2020. As a result, given their relatively constant incomes, households may be subject to additional pressure to meet other food and non-food expenses.
• Socio-political unrest: The Petrocaribe situation and the parliamentary elections in October are likely to lead to political unrest, which, in addition to the lack of government and the rife insecurity in the country, could have consequences for the depreciation of the gourde and therefore both physical and economic consequences for households’ access to food.
• Food availability: Between June and July 2019, the supply of food to markets is expected to be normal, especially for local products from the spring harvest, particularly in areas where this growing season is developing as normal. However, uncertainty linked to possible socio-political unrest could jeopardize markets’ functioning and normal food supply. Moreover, spring harvests may be below average due to forecasted erratic weather. As a result, households may find it difficult to build lasting reserves.

Most likely food security outcomes

From June to September, food availability should be ensured by crops from the spring harvests (beans, maize, etc.) and other crops such as root vegetables, tubers, bananas, breadfruit and certain other fruits, particularly mangos. However, the persistent drought, which led to the late start to the 2019 spring harvest in some areas, particularly the northern part of the country, cast doubt on the possibility of improving local food availability. Thus, purchases of food at markets may remain predominant.

In addition, the production and sale of charcoal and the sale of labor and crops will generate income for very poor households. However, in the context of rising prices and significant exchange rate fluctuations, purchasing power will remain weak, with the poorest households having reduced access to staple foods. In these circumstances, the poorest households will continue to engage in negative coping strategies to meet their food needs. As a result, most regions will remain in Stressed (IPC Phase 2) or Crisis (IPC Phase 3) food insecurity.

The second period in the scenario (October–January) coincides with the summer/autumn harvests and with the launch of the winter growing season in the plains and wet mountain areas. Consumption is expected to return to normal levels. This is partly because of the harvest but also because of the seasonal increase in agricultural income. Moreover, the sale of labor and other sources of income should enable households to access local and imported products. The availability of some local products will lead to a relative decline in food prices, and an increase in remittances from Haitian migrants to their relatives will increase the circulation of foreign currencies, slightly improving the gourde/United States dollar exchange rate. The whole country will therefore be experience Stressed (IPC Phase 2) food insecurity, with some communes experiencing Crisis (IPC Phase 3) food insecurity and others experiencing no food insecurity (IPC Phase 1).

EVENTS THAT MIGHT CHANGE THE OUTLOOK

Possible events over the next six months that could change the most likely scenario.